Blackstone Aims to List Mega REIT in 2025 with $1 Billion IPO
US-based investment firm Blackstone and its partners, Sattva Group and Panchshil Realty, are targeting to raise $1 billion through an initial public offering (IPO) of their mega real estate investment trust (REIT) in 2025. The REIT will boast a commercial
BlackstoneReitIpoSattva GroupPanchshil RealtyReal Estate MumbaiDec 05, 2024
The REIT will encompass a commercial property portfolio of 50 million sq ft, making it the largest in Asia and one of the largest in the world. The portfolio will be a collaborative effort involving three sponsors Nucleus Office Parks owned by Blackstone, Sattva Group from Bengaluru, and Panchshil Realty from Pune. Nucleus and Sattva will contribute 20 million sq ft and 25 million sq ft, respectively, while the remaining will come from Panchshil.
When contacted, Blackstone did not provide any comments, and Sattva and Panchshil were unreachable for verification. Despite recent allegations by the Hindenburg report, which suggested that Blackstone benefited from changes in REIT regulations by SEBI due to a connection with SEBI's chief, Madhabi Puri Buch, SEBI has firmly denied these claims. Sources reveal that the plans are moving forward regardless.
Morgan Stanley, known for its work on Blackstone's previous REIT listings, has been brought on board for the upcoming mega REIT offering, along with local investment banks. This will be Blackstone's fourth REIT listing, following the successful launches of Embassy Office Parks REIT with Embassy Group, Mindspace Business Parks REIT with K Raheja Corp, and its retail property REIT, Nexus Select Trust.
In addition to the REIT, Blackstone is also preparing to launch an IPO for Ventive Hospitality, a hotel company co-owned with Panchshil. The company recently received SEBI’s approval and is expected to go public soon.
Nucleus Office Parks currently owns 14 Grade A commercial parks spanning nearly 20 million sq ft across cities like Mumbai, Gurugram, Bengaluru, and others. Sattva Group has a significant presence in Bengaluru and Hyderabad, while Panchshil operates primarily in Pune.
According to a recent Vestian report, India's REIT market is still in its early stages, with only four listed REITs covering an area of 125 million sq ft across retail and office markets. The market capitalization of REITs in India stands at about 13.7% of the total listed real estate sector, significantly lower than mature markets like the USA (98.9%), Australia (94.8%), and the UK (92.5%). The report also notes that about 60% of the country’s Rs 4.5-lakh-crore worth of Grade A office stock can be included in REITs, indicating a substantial growth potential in the sector.
Frequently Asked Questions
What is the target amount for the IPO of the mega REIT planned by Blackstone and its partners?
The target amount for the IPO of the mega REIT planned by Blackstone, Sattva Group, and Panchshil Realty is $1 billion (approximately Rs 8,400 crore).
When is Blackstone planning to file the DRHP for the REIT IPO?
Blackstone is planning to file the draft red herring prospectus (DRHP) for the REIT IPO early next year.
What is the size of the commercial property portfolio for the REIT?
The commercial property portfolio for the REIT will be 50 million sq ft, making it the largest in Asia and one of the largest in the world.
Who are the three sponsors contributing to the REIT portfolio?
The three sponsors contributing to the REIT portfolio are Nucleus Office Parks owned by Blackstone, Sattva Group from Bengaluru, and Panchshil Realty from Pune.
What other significant initiatives is Blackstone undertaking apart from the REIT IPO?
Apart from the REIT IPO, Blackstone is also preparing to launch an IPO for Ventive Hospitality, a hotel company co-owned with Panchshil, which recently received SEBI’s approval.
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